Case | HBS Case Collection | March 2013

Massachusetts Financial Services (Abridged)

by Brian J. Hall and Karen Huang

Abstract

This case describes the compensation and performance evaluations at an investment management company. The senior management team of Massachusetts Financial Services (MFS) Investment Management was contemplating an introduction of hedge funds at the firm, but many believed that typical hedge fund manager pay (20% of the upside) would harm the MFS culture, which glorified "star performance but not star egos." The case presents the MFS compensation philosophy and plan (including the plan's emphasis on subjective compensation), the types of people it attracted, the resulting culture, and how the senior management team approached the hedge funds question. It includes side discussion on firm-specific human capital. This is an abridged version of an earlier case.

Keywords: compensation; incentives; investment management; performance measurement; portfolio management; Motivation and Incentives; Asset Management; Performance Evaluation; Compensation and Benefits; Financial Services Industry; Massachusetts;

Citation:

Hall, Brian J., and Karen Huang. "Massachusetts Financial Services (Abridged)." Harvard Business School Case 913-036, March 2013.